OTTAWA – Foreign Affairs Minister Chrystia Freeland says the outlines of a deal with the United States to resolve the softwood lumber dispute are in place.
But she can’t predict whether the persistent trade irritant will be settled before negotiations begin on Aug. 16 to overhaul the North American Free Trade Agreement.
“I do think an agreement which benefits both Canada and United States … is absolutely possible and achievable and I can see the outlines of that agreement already,” Freeland said Monday in a teleconference call from Manila, Philippines, where she was attending meetings with her counterparts in the Association of Southeast Asian Nations.
“Having said that, I can’t today say whether or not and when such an agreement might be achievable.”
The federal government and British Columbia Premier John Horgan, whose province produces about half of Canada’s softwood, have been pushing to resolve the dispute before the start of NAFTA renegotiations rather than risk having the issue sidelined or bogged down for months in the broader trade talks.
Freeland said federal officials — “including very much me personally” — have been “very actively and energetically and substantively engaged with the U.S.” on the softwood file for the past two months.
Softwood lumber was not included in NAFTA when it was originally crafted in 1994. The two countries have instead negotiated a series of multi-year agreements specifically on softwood, the last of which expired in 2015.
In April, the U.S. slapped countervailing duties on Canadian softwood imports, which averaged out at about 20 per cent.
It imposed an additional seven per cent in anti-dumping duties in June.
The U.S. argues most Canadian wood is harvested from Crown lands and is sold for less than market prices as a way to subsidize the industry and make Canadian wood more attractive compared to American domestic products — a charge Canada denies.
Canada’s argument that U.S. countervailing duties on softwood are improper has been backed by the World Trade Organization and a bi-national panel under NAFTA’s dispute settlement provisions.